High subsidy big concern in crisis-time budget

High subsidy requirement remains main concern in the forthcoming fiscal budget set to be placed in parliament at a time when the economy is facing severe internal and external shocks, sources say.The finance division will submit draft budget to the Prime Minister today (Wednesday) for her consent on the policy changes and new measures crafted for the next fiscal year, officials said.

The budget for the financial year 2023-24 will be placed on June 1.

The finance officials have proposed the size of the budget at an incremental figure of Tk 7.64 trillion. The new budget will have an allocation of Tk 1.10 trillion for subsidy and incentives, marking a record 33-percent rise compared to the previous year.

In the current fiscal year total allocation for subsidy and incentives was Tk 827.45 billion which in the revised budget was hiked to Tk 1.02 trillion.

The allocation for social protections will be Tk 1.18 trillion in the budget for 2023-24 in a rise from Tk 1.13 trillion in the current fiscal year, according to finance officials. They said the government would expand the safety-net coverage in next fiscal year keeping in mind the next year’s national election.

The allocation for social-safety net, according to officials, will rise since the government wants to expand coverage as well as the amount of allowance for each beneficiary in some categories. Government spending on interest payments will also increase mainly due to devaluation of the Taka against the US dollar, the finance officials said.